The Bombay High Court has quashed the Enforcement Directorate’s attachment of properties worth Rs25 crore linked to Pune-based businessman Avinash Bhosale and entities associated with his family, ruling that the agency had not established a connection between the transactions and alleged proceeds of crime.
A division bench of Justices Ajay Gadkari and Kamal Khata allowed appeals filed by Bhosale, his wife Gauri and Samit Realty Pvt Ltd. The bench also dismissed the Enforcement Directorate’s appeal against an order of the appellate tribunal.
The properties attached by the agency included a 6,143.71-square-metre plot in Pune, valued at Rs14.65 crore and held in the names of Bhosale and Gauri. The attachment also covered a 20,200-square-metre plot in Nagpur. The combined value of the properties was assessed at Rs25 crore.
The proceedings formed part of the Enforcement Directorate’s investigation into an alleged Rs3,983-crore financial fraud involving transactions between Yes Bank and Dewan Housing Finance Corporation Ltd, or DHFL. The agency had alleged that Rs164.64 crore was transferred to Bhosale and entities linked to him through an investment advisory agreement and a transaction involving the sale of a dairy business.
While setting aside the attachment, the high court rejected the Enforcement Directorate’s arguments that the transactions could be treated as connected to the alleged offence. The court observed that authorised banking transactions carried out in the ordinary course of business could not automatically be classified as proceeds of crime without establishing the required link to the alleged offence.
The order has direct implications for the status of the attached land parcels in Pune and Nagpur. Property attachment under the Prevention of Money Laundering Act restricts the dealing, transfer or use of assets during proceedings, making the court’s decision significant for the affected owners and entities.
The ruling also sets out the evidentiary requirement for linking a property to an alleged financial offence. The court’s observation indicates that the existence of a banking transaction, by itself, is not sufficient to establish that an asset represents proceeds of crime. The agency must demonstrate the necessary connection between the transaction, the alleged offence and the property under attachment.
The high court’s decision followed the appeals filed by Bhosale, Gauri and Samit Realty, as well as the Enforcement Directorate’s challenge to the appellate tribunal’s earlier order. The court’s ruling has now set aside the attachment covering the identified Pune and Nagpur properties.
